2011 05 11 IAB MinutesINVESTMENT ADVISORY BOARD
Meeting
May 11, 2011
CALL TO ORDER
Regular meeting of the La Quinta Investment Advisory Board was called to order at the
hour of 4:00 p.m. by Chairman Park followed by the Pledge of Allegiance.
PRESENT: Board Members Mortenson, Blum, Park and Spirtos
ABSENT: None
OTHERS PRESENT: John Falconer, Finance Director, Lynn Love, Relations
Manager, Wells Fargo Bank, Louise West, Accounting
Manager, Diane Martin, Financial Services Assistant and
Vianka Orrantia, Senior Secretary
PUBLIC COMMENT - None
III CONFIRMATION OF AGENDA - Confirmed
IV CONSENT CALENDAR
1. Approval of Minutes of Meeting on April 13, 2011 for the Investment Advisory
Board.
Board Member Spirtos requested a correction be made to page 3, item B., fourth
sentence to read, "possible alternative, since tgan staff has come across
another possible [...1."
MOTION - It was moved by Board Members Spirtos /Mortenson to approve the
Minutes of April 13, 2011 as amended. Motion carried unanimously.
V BUSINESS SESSION
A. Banking Services Presentation by Wells Fargo Bank
Lynn Love, Relations Manager of Wells Fargo Bank gave a brief
presentation of the proposed banking services and savings being offered
for the extension of a three year contract between Wells Fargo Bank and
the City of La Quinta.
Mr. Falconer clarified for the Board that the existing contract with Wells
Fargo Bank will expire on December 31, 2011.
Mr. Falconer advised that staff, Louise West and Diane Martin work
closely with Wells Fargo on a daily basis, and were present to address
any concerns and /or answer any questions that the Board might have
regarding Wells Fargo Bank.
In response to Board Member Blum, Mr. Falconer advised that the last
page of the staff report reflects the breakdown based on the City's
current activity. The bank proposed an additional 25% savings from the
City's current rates and a 55% discount over standard pricing. The
current standard rate is at $2,600 a month, the City's current average is
at $1,600 per month and under the new contract the rate will be $1,200
per month, with a savings of $5,000 per year or a total savings of
$15,000 over the three years.
General discussion ensued amongst the Board and staff regarding the
various services provided by Wells Fargo Bank and the savings derived
from some of the services being offered under the new contract.
In response to Mr. Falconer, Ms. Love advised that the new rates being
offered under the new contract would become effective immediately.
Motion — It was moved by Board Members Mortenson /Blum to
recommend to Council for approval a Banking Services Contract with
Wells Fargo from January 1, 2012 through December 31, 2014. Motion
carried unanimously.
The Board thanked Ms. Love for her presentation and attendance, in
addition to thanking Mrs. West and Mrs. Martin.
B. Transmittal of Treasury Report for March 2011
Mr. Falconer presented and reviewed the staff report for the month of
March advising the Board of a decrease in the cash balance by $6.80
million for the month due to $5.7 million for debt service payments, $4
million to Capital Improvement Projects of which $3.6 million for land in
the Village between the Library and Old Town. Mr. Falconer stated that
the land acquisition was a result of the potential closure of the
Redevelopment Agency.
2
Mr. Falconer advised of a Commercial Paper purchase and a Federal
Home Loan Bank Discount Note purchase as a result of maturing
investments. He further advised that the portfolio remains at 50 basis
points comparable to the previous year and the average maturity of the
portfolio ended the month at 218 days.
Mr. Falconer commented on staff's consideration of alternatives to LAIF,
which he stated will be discussed later in the meeting.
In response to Board Member Spirtos, Mr. Falconer advised that the
Quimby funds have been budgeted as reflected on page 8. The funds
were intended to fund a regional park with other neighboring cities and
the County; however, due to current the economy, there have been no
further discussions or plans for the park. Mr. Falconer further advised
that the Park Equipment Replacement Fund was budgeted for items such
as equipment replacement at the City parks and the City's pool
renovation. Mr. Falconer commented that due to the declining general
fund revenue the City has not been able to budget additional monies back
into this particular fund.
In response to Board Member Spirtos, Mr. Falconer clarified that the
Landscape and Lighting Fund reflects a negative balance due to paying
monthly maintenance fees but is reimbursed twice a year from the
County.
General discussion ensued amongst the Board and staff regarding the
change in the City's landscaping from turf to desert scape.
In response to Board Member Mortenson, Mr. Falconer advised that due
to some settling in the economy staff feels at ease with investing in LAIF
at this time but would still consider other investment alternatives.
General discussion ensued amongst the Board and staff regarding
alternatives to LAIF.
In response to Chairman Park, Mr. Falconer clarified as to why the City
does not report the reimbursement monies received twice a year from the
County for lighting and landscaping as a positive balance on the
Distribution and Cash Balance report.
MOTION - It was moved by Board Members Blum / Spirtos to review,
receive, and file the Treasurers Report for March 2011. Motion carried
unanimously.
c
C. Continued Discussion of the Investment Advisory Board 2011 -2012 work
Plan and Fiscal Year 2011 -2012 Investment Policies
Mr. Falconer advised of the process of the approval of a draft investment
policy to be presented at the June meeting for discussion with the City
Manager and City Attorney, upon approval of the draft policy by the
Board, staff will forward the policy for final approval by the City Council.
Mr. Falconer advised of his attendance to the annual CMTA Conference
and his efforts to seek out from other government entities other
investment alternatives. Mr. Falconer advised that due to the low
interest rates, mutual funds were not a suggested alternative at this time.
Mr. Falconer further advised that at the CMTA Conference other
alternatives to LAIF such as the CAMP Program, Caltrust Program, and
the County Pools were discussed. These three investments have been
discussed by the Investment Advisory Board in the past and at the
conference he was informed that the Government Code Section dealing
with County pools states that the disbursement of funds could be
delayed up to 30 days.
In response to Board Member Blum, Mr. Falconer advised that he would
investigate as to whether or not the 30 day delay applies to LAIF. .
In response to Board Member Mortenson, Mr. Falconer summarized the
CAMP investment tool and how it works.
General discussion ensued amongst the Board and staff regarding
possible alternative investment tools, including the interest bearing active
bank deposit program with Rabobank.
In response to Board Member Mortenson, Mr. Falconer advised that he
would reconfirm the CUSIP numbers listed on the Union Bank Holdings -
Reporting Trades sheets (custodian for Rabobank) for the Cook County,
Illinois School District investment.
MOTION - It was moved by Board Members Blum /Spirtos investigate
further the Rabobank investment program. Motion carried unanimously.
In response to Board Member Blum, Mr. Falconer advised that if directed
by the Board, staff will further investigate the Rabobank investment
program and will incorporate his findings into a staff report as well
incorporate into the investment policy for the Board's consideration at the
next scheduled meeting.
2
VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report — April 2011
A general comment was made by Mr. Falconer on the decline of the T- Bills.
Noted and Filed
B. Pooled Money Investment Board Reports — February 2011
Noted and Filed
C. Update on California Municipal Treasurers Association Conference
Mr. Falconer updated the Board on the conference in San Diego, California that
was attended by staff.
VII BOARD MEMBER ITEMS - None
VIII ADJOURNMENT
MOTION - It was moved by Board Members Mortenson /Blum to adjourn the meeting at
5:06 p.m. Motion carried unanimously.
S mitted b
✓t
Vianka Or antis
Senior Secretary
5